The Midwest has ample moisture heading into the spring season, but there are areas of the country where persistent drought is making things tough, especially for cattle producers.
The price of beef cows may go down this summer, if producers can not find a place from them to graze during the lingering drought. Stocker cattle prices may see the same. More cattle headed for fewer acres, and that could cause a cost price squeeze.
AUDIO: Profit Matters 5-11-18
A large portion of the Southern Great Plains, stretching across Kansas, Oklahoma and the Texas Panhandle, remains under the tightening grip of a strong drought with little opportunity in the forecast to break the dry pattern any time soon.
Oklahoma State University (OSU) Extension cattle market economist Dr. Derrell Peel told Radio Oklahoma Network (RON) farm director Ron Hays that the impact of this drought is beginning to significantly affect beef producers and their decisions moving forward. While most were counting on forage growth to ramp up around this time, the prospects of that happening are becoming less likely.
?In terms of the broader drought, I think we?re at the critical time now. There?s not an expectation of a lot of forage growth,? Peel said. ?The next four to six weeks I think is very critical in that country. That?s when we expect to see forage growth take off.?
Peel reports that approximately 53.5 million acres are under D3 and D4 drought conditions, the two worse categories on the National Drought Monitor scale. He says that with warmer weather on the way, that drought area could expand in the next few weeks, if additional moisture fails to arrive.
Some producers have already started forming a contingency plan, which would include moving herds to greener pastures outside the affected area, increasing culling and early weaning of calves. Peel predicts this activity could potentially be felt down the road in regional cow and feeder markets. Further, he adds stocker operations will have no guarantee that there will even be available pasture for them later on.
?So, we?re looking at the potential to impact quite a large number of animals as we through May and into June and beyond if it continues dry,? Peel said.
